Zenefits Investors Cut Valuation by Half

Rolfe Winkler

Embattled health-benefits broker Zenefits on Thursday said it struck a deal with some investors to cut its valuation by more than half to $2 billion, giving them additional shares in exchange for releasing the company of potential legal claims.

Zenefits, a once highflying startup that in just two years after its founding was valued at $4.5 billion, has been reeling from regulatory investigations, stalled sales, layoffs and management missteps. On Thursday, Zenefits’s recently installed chief executive, David Sacks, said the...